Residential real estate companies, claiming that it’s harder than ever to eke out a profit, are increasingly hitting their own agents with additional fees and expenses. Upfront costs rise for agents” class=”read-more-link”>[more]
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Brooklyn district getting Dumbo-style facelift Where’s Wallabout?” class=”read-more-link”>[more]
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Controversial One Brooklyn Bridge Park hits the market Brooklyn’s biggest starts selling” class=”read-more-link”>[more]
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Subprime woes spreading to broader market Mortgage fallout hits New York City” class=”read-more-link”>[more]
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Biggest Manhattan firms growing, though more slowly than before Brokerage behemoths” class=”read-more-link”>[more]
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Industry shift pulls back from condos, aims at commercial [more]
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Some deals fail while others gel as transit project appears to get rolling [more]
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Deal sizes shrinking though rents edge upward [more]
Downtown project to open $400-a-night rooms this summer [more]
City’s prolific hotel builders mostly turning away from lower price bracket [more]
Power brokers drawn to top-tier office building [more]
Buyers in recent mega-deals willing to wait to see returns [more]
Lipstick Building on the block
Tishman Speyer Properties is selling the 34-story, 587,000-square-foot Lipstick Building at 885 Third Avenue, the New York Daily News reported. The building is expected to fetch more than $587 million. Tishman purchased the commercial property in 2004 for $235 million; CB Richard Ellis is handling the sale. [At press time, the building sold for $607 million to Los Angeles-based Metropolitan Real Estate Investors.]NYT building selling for $500M
Tishman Speyer is also selling the current New York Times headquarters at 229 West 43rd Street and hopes to get about $500 million, or $667 a square foot, for the 15-story building, according to the New York Times. Tishman purchased the property in November 2004 for $175 million. The 750,000-square-foot building, constructed in 1913, is in need of renovation. The Times Company will be moving its headquarters to a new, under-construction tower at 620 Eighth Avenue later this year. [At press time, Africa Israel Investments agreed to purchase the building for $525 million.]$1,500 per square foot for 450 Park?
The 32-story, 313,000-square-foot office building at 450 Park Avenue is on the market for sale and could fetch as much as $1,500 per square foot, or $469.5 million, according to the New York Observer. The price would set a per-square-foot record for an investment sale in the city. The building has some of Manhattan’s highest office rents, with space on available floors asking between $110 and $140 per square foot. Doug Harmon of Eastdil Secured is handling the sale.Bids due for Mt. Sinai’s 1212 Fifth Avenue
Bids were due last month for Mt. Sinai Hospital’s 15-story, 76-unit apartment building at 1212 Fifth Avenue, the New York Post reported. The Related Companies and Extell Development Co. are among the bidders for the property, which comes with development rights and was expected to go for more than $200 million.Flipping the Brill Building
The Brill Building at 1619 Broadway, a hub for popular music songwriting and publishing in the 1950s and 1960s, is on the sales market, the New York Sun reported. A joint venture of Murray Hill Properties and Westbrook Partners expects to get more than $140 million for the 175,000-square-foot office building, or $800 a square foot. The partnership paid $98 million for the 11-story building last October.Flushing development site asking $49M
A development site at 40-70 Delong Street in Flushing, just east of Flushing Meadows Park in Queens, is on the market for sale at an asking price of $49 million. The site can support 557,549 square feet of commercial development with a community component. Thomas Donovan and Mack Tham of Massey Knakal are the exclusive sales agents.Herald Square office building on the market
The 91,050-square-foot, 20-story office building at 989 Sixth Avenue is on the market for sale and is expected to fetch close to $38 million, or about $400 a square foot, according to the Sun. Owner Himmel + Meringoff Properties bought the building in 1985.Astoria commercial building on the block
The three-story, 51,000-square-foot commercial building at 2856-2860 Steinway Street in Astoria is on the market for sale at an asking price of $23.25 million. The building is fully occupied by three retail tenants: Duane Reade, Washington Mutual and New York Sports Clubs. Robert Knakal and Rubin Isakharov of Massey Knakal are the exclusive sales agents.Second Avenue development site for sale
A five-story walk-up apartment building at 1162 Second Avenue, also known as 301 East 61st Street, is on the market for sale at an asking price of $17.2 million. The owners are vacating the building and have acquired air rights that allow the site to support 45,812 square feet of residential development. Robert Knakal, Clint Olsen, Jonathan Hageman and Daniel Hagan of Massey Knakal are the exclusive sales agents.Knitting Factory on the block
The building that houses the Knitting Factory music venue, 74 Leonard Street, is up for sale. Nearly a third of the 27,000-square-foot building is taken up by the venue, which has leased space at the location since 1994. The venue and the 18 decontrolled residential lofts above it will be included in the sale, which is expected to fetch between $15 and $16 million, according to Adelaide Polsinelli, senior executive broker at Besen & Associates, which is marketing the property. The Knitting Factory will continue to operate at 74 Leonard Street through its 2009 lease, but there has been no decision as to the future of the venue.
Developers bet on Catskills casino [more]
Balance tilts away from bargaining as deals continue to heat up [more]
Credit tightening on low end hasn’t yet affected well-heeled residential buyers [more]
Sales of less restrictive condos could change the landscape [more]
Auction ads typically run in small papers with limited distribution [more]
Fallout in the mortgage market in New York City and nationwide [more]
Firms add more agents as top firms buy out smaller rivals [more]
Seasonal changes for residential deals show less dramatic shifts [more]
Wave of rising prices doesn’t extend far beyond Manhattan [more]
Green construction to rise where doctor blew up home [more]
Real estate prices separate New York City from everywhere else [more]
Richard Steinberg, senior managing director, and Renee Bross Steinberg, managing director, Warburg Realty, married for 34 years. [more]
Firm management walk fine line in quest for profits [more]
President and chief executive officer, the Corcoran Group, one of Manhattan’s biggest brokerages [more]
Surprising details like mini moats and 26-foot fireplaces in new condo entrances [more]
In the past, you could build any old steel-and-glass box and sell it for big bucks. [more]
Jersey City officials seek Tribeca-style makeover for Powerhouse District [more]
Chelsea
Chelsea Modern
447 West 18th Street
Sales are under way at Madison Equities’ 12-story, 47-unit condominium designed by Audrey Matlock. Prices for available units range from $1.63 million for a 1,300-square-foot two-bedroom to $3.57 million for a 1,887-square-foot three-bedroom. Occupancy is scheduled for early 2008. The Corcoran Sunshine Marketing Group is the exclusive marketing and sales agent. Contact: www.chelsea-modern.com.Chelsea
459 West 18th Street
The sales office opened in March for the 11-story condominium designed and developed by Della Valle Bernheimer Architects. Occupancy of the full floor residences and multi-floor penthouses is scheduled for spring 2008. The Corcoran Group is the exclusive sales and marketing agent. Contact: www.459west18th.com.East Elmhurst
112-02 Northern Boulevard
Developer LEV Group plans to construct a 44,000-square-foot mixed-use condominium just west of Shea Stadium in Queens. The building will include a full gym and a roof deck. Sales are expected to begin this spring. Contact: www.levdevelops.com.Midtown East
865 United Nations Plaza
Sales are expected to begin soon at the 18-story, 57-unit luxury condominium conversion of a Tudor-style rental building, originally built in 1929. Studio and one-bedroom units will range in size from 660 to 990 square feet. Prices will start at $446,000 for studios and at $795,000 for one-bedrooms. Halstead Property is handling sales and marketing. Contact: www.halstead.com.Midtown West
405 West 53rd Street
SDS Procida will build an 82-unit luxury condominium designed by Smith-Miller + Hawkinson Architects on the 34,700-square-foot site. The project will include nine triplex and 22 duplex townhouses, as well as 51 simplex units. Residents will have access to underground parking, a health club and private and public terraces. Construction, which will begin this spring, is slated for completion in winter 2008. Contact: www.sdsprocida.com.Midtown West
505 West 47th Street
A joint venture of Parkview Development and LEV Group began construction earlier this year on the 84,000-square-foot, 109-unit condominium. The two mid-rise towers will have a shared terrace, a garden, a greenhouse and a gym. Sales are expected to begin this spring. Contact: www.levdevelops.com.Tribeca
Artisan Lofts
143 Reade Street
Developer Tribeca Associates is converting a prewar industrial loft into an 18-story, 38-unit condominium. BKSK Architects designed the exterior; Roman & Williams are the interior designers for the two- to four-bedroom homes. The units range in size from 1,500 to 3,000 square feet, including a full-floor penthouse and three tower residences on the top levels. The building will house a children’s play space, a roof garden and a fitness center. An art gallery in the lobby will feature four professionally curated installations per year. Completion is slated for fall 2008. Corcoran Group Marketing is the exclusive sales and marketing agent. Contact: www.artisanlofts.com.Upper East Side
The Brompton
205 East 85th Street
The Related Companies plans to open the sales office for the 22-story Robert A.M. Stern-designed condominium by the end of spring. Residents of the studio to five-bedroom units will have access to an Equinox fitness club, an entertainment lounge, a children’s playroom and 24-hour concierge service. Occupancy is expected in fall 2008. Related Sales is the exclusive sales and marketing agent. Contact: www.thebromptonnyc.com.Upper East Side
The Legacy
157 East 84th Street
Sales are under way on what Core Development Group is calling the first glass curtain-wall condominium on the Upper East Side. The seven-story, seven-unit conversion of a former garage will include two duplex townhouses, three floor-through units and two duplex penthouses. The units range in size from 3,300 to 5,500 square feet, with prices running from $1,300 to $1,800 a square foot. Completion is expected by this fall.Upper East Side
255 East 74th Street
The World-Wide Group has begun construction for the 30-story, 87-unit luxury condominium. H3 Hardy Collaboration is the lead architect. The project is aimed at growing families and will feature a 42,000-square-foot Equinox Fitness Center and 2,400 square feet of space designed for children and teens. Two- to five-bedroom units will be available; more than 70 percent will be three- or four-bedrooms. The largest apartments will be 3,500 square feet; prices will range from $2.5 to $7 million. Occupancy is slated for late 2008. Contact: www.255east74th.com.Williamsburg
80 Met
80 Metropolitan Avenue
Steiner Equities is building a six-story luxury condominium on the site of the former Old Dutch Mustard building. The firm purchased the 127,000-square-foot site last year for $25 million and quickly demolished the long-vacant factory. The first phase of construction will bring 124 units to the market; the second will likely add 50 more units. The development will include a mix of standard apartment layouts as well as townhouses, and it will have an indoor pool. GreenbergFarrow is designing the project; Halstead Property will market it.Williamsburg
Lucent
170 North 11th Street
Sales are under way for the Kiska Group’s six-story, 28-unit luxury condominium designed by Gene Kaufman. The building’s one- and two-bedroom homes will range in size from 668 to 1,260 square feet. Four two-bedroom penthouses will range from 1,246 to 1,260 square feet and feature private roof decks. Prices start at $475,000 and completion is scheduled for late 2007. The Developers Group is the exclusive sales and marketing agent. Contact: www.lucentcondo.com.Construction update
Chelsea
175 Ninth Avenue
The General Theological Seminary has reversed course on a plan to build a 15-story condominium tower on its campus after news of the plan met with fierce community opposition, the Sun reported. The seminary wanted to build a 151-foot tower to generate $21 million in revenue for renovation of its existing 19th century buildings, but community activists charged the tower would have been out of place in the neighborhood. Officials intend to present a plan for a seven-story mixed-use residential building this month.Lower East Side
250 Bowery
Construction work has begun on the city’s first green hotel-condominium. Flank Architects’ eight-story, 61,000-square-foot project will have 63 rooms, each around 450 square feet. The design incorporates energy-saving features such as a façde that optimizes natural light, insulating glass window units and reclaimed wood furniture. Amenities will include a spa and gallery, interior and exterior rooftop seating, a green roof and two subterranean levels.Midtown
The Plaza Hotel
Central Park and Fifth Avenue
Owner Elad Properties said the hotel’s converted condominium and hotel-condo units will open on October 1, the building’s 100th birthday, NY1 reported. In addition to 282 transient hotel rooms, the renovated landmark will have 181 condominium units and 150 hotel-condo units. The condominium units, which are said to be 80 percent sold, range in price from $2.5 million to more than $40 million.Upper West Side
165 West 86th Street
Richman Housing Services is planning a 21-story residential building adjoining the West-Park Presbyterian Church. The project will have separate entrances for its 50 affordable studio rentals on floors five through 10, and its 27 market-rate condominiums on floors 11 through 21. Some community members say the separate entrances will create “segregation” in the building.Financing
Flatiron
650 Sixth Avenue
Palisades Financial provided $93 million in financing for the acquisition and construction of the 67-unit condominium conversion. The units will range in size from 701 to 2,622 square feet. The project will also include 16,527 square feet of retail space. Shvo Marketing is the marketing agent for the residential space. Contact: www.650sixthave.com.Midtown
855 Sixth Avenue
Fremont Investment & Loan closed a $105.3 million loan to Tessler Developments and the Chetrit Group for the acquisition and development of the mixed-use project. The 37-story, 500,000-square-foot building will have luxury condominiums on floors 15 through 37. The first two floors will contain retail space, and offices will occupy floors three through 14. Construction is slated to begin by the end of 2007.Sales update
Battery Park City
The Visionaire
70 Little West Street
In its first week of sales, the 35-story condominium saw 10 percent of its 251 units sold. Prices start at $700,000 for studios and reach $10 million for penthouses. Completion is scheduled for fall 2008. The Marketing Directors Inc. is the exclusive sales and marketing agent. Contact: www.thevisionaire.com.Harlem
The Langston
68 Bradhurst Avenue
By early April, the Gotham Organization and the Richman Group Development Corp. had sold 60 percent of the 10-story luxury condominium’s 180 units. Construction was recently completed for the mixed-use project, which includes 37,000 square feet of ground-floor retail space and an 80-car parking garage. The building’s two- and three-bedroom homes, including 13 duplex penthouses, range in price from $630,000 to $995,000. Occupancy began in April. Contact: www.thelangston.com.Harlem
Casa Loma
229 West 116th Street
By the middle of March, eight weeks after the start of sales, Manor Properties Group had sold half of the condominium’s 16 units. Prices for the eight available units start at $450,800 for one-bedrooms and at $550,000 for two-bedrooms. A 1,660-square-foot duplex with private outdoor space is available for approximately $750,500. Warburg Marketing Group is the exclusive sales agent. Contact: www.warburgrealty.com.Harlem
The Lenox
380 Lenox Avenue
Uptown Partners’ 12-story, 77-unit condominium was more than 60 percent sold as of mid-April. Occupancy began earlier this year. Available units include two-bedrooms priced from $740,000 to $850,000; three-bedrooms priced from $830,000 to $1.1 million; and one- to three-bedroom penthouses with rooftop terraces priced from $1.3 to $1.9 million. Griffin Real Estate Group is the exclusive sales agent. Contact: www.thelenoxnyc.com.Long Island City
View59
24-15 Queens Plaza North
More than 55 percent of the condominium’s 39 units had been sold by mid-March, within five months of the start of sales. Units range in size from one-bedrooms to two-bedroom penthouses, and are priced from $410,000. Occupancy is slated for fall 2007. The Developers Group is the exclusive marketing and sales firm. Contact: www.view59.com.Lower Manhattan
W Hotel
123 Washington Street
The Moinian Group tapped Shvo Marketing to sell the 222 residential units in the planned W Hotel, which will also include 217 hotel rooms. The project, designed by Gwathmey Siegel & Associates Architects, is slated to open for occupancy in 2008, with the sales office opening later this year, according to GlobeSt.com.Midtown West
Archstone Clinton
510 West 52nd Street
Leasing is under way at the 24-story, 627-unit green rental complex, which is slated for occupancy in February 2008. Archstone-Smith and the Dermot Company are developing the two-building project, which will include 23,000 square feet of retail space. Rents for studios start at $2,600 per month, the New York Post reported. Contact: www.archstoneapartments.com.Upper East Side
Maison East
1438 Third Avenue
By late March, three months after sales began, Broad Street Development’s 100-unit condominium conversion was 50 percent sold. The 31-story project has one- to three-bedrooms ranging in size from 775 to 2,000 square feet, priced from $800,000 to $3.2 million. Occupancy will begin in summer 2007. Prudential Douglas Elliman is the exclusive sales agent. Contact: www.maisoneast.com.Upper West Side
The Apple Bank Building Condominium
2112 Broadway
Nineteen of the project’s 29 converted condominium units had been sold by early April after sales began last summer. The conversion, designed by SLCE Architects, was completed last year, and some units are already occupied. The 10 available units comprise five top-floor duplexes, four three-bedrooms and one four-bedroom. They range in size from 1,967 to 3,256 square feet, and are priced from $3.35 to $7.65 million. Brown Harris Stevens is the exclusive sales agent. Contact: www.brownharrisstevens.com.Development in Brief
Manhattan (north to south)
Fifth Avenue between 109th and 110th streets
Two developers, Brickman and Sidney Fetner Associates, plan to build a tower of 115 luxury condominiums above the new location of the Museum for African Art, the New York Times reported. Construction is expected to begin in spring 2008 and be completed by the end of 2009. Architect Robert A. M. Stern and SLCE Architects will work on the project.131-139 West 45th Street
Extell Development has announced plans for a 50-story, 268,000-square-foot condominium and hotel building at the site, Curbed.com reported.304 Fifth Avenue
The site is on the market for sale with plans for a 15-story mixed-use building that includes 10 floors of residential condominiums.60 Madison Avenue
Joseph Moinian has abandoned plans to convert the 200,000-square-foot prewar office building into residential condominiums, the New York Post reported. The building will remain commercial.
Big new development projects around New York City [more]
Atlanta
Between 2000 and 2006, Atlanta gained about 890,000 residents, more than any other metro area in the country, the Atlanta Journal-Constitution reported. Dallas, Houston, Phoenix and Riverside, California round out the top five. The growing city’s population reached the five million mark, making it No. 9 in national rankings while passing Boston and Detroit. Those migrating to the 28 counties of the Atlanta area are finding relatively inexpensive housing and warmer weather, though the area is seeing overcrowding of schools and slower job growth than in the late 1990s. In comparison, New York has a population of 18.8 million but has seen only half the increase of Atlanta this decade.
Boston
Campanelli Cos. has proposed to build Boston’s largest-ever residential development, a 72-acre complex that would extend into the neighboring town of Dedham, the Boston Globe reported. The builder hopes that Boston will annex 37 acres of Dedham property in order to keep the project within the city’s boundaries. The development would be called Neponset Village and have 1,850 units in low-level buildings, and possibly a small commercial component.
Residential properties on the market in Boston range anywhere from the low extreme of $89,000 all the way up to $16.5 million, according to the Boston Globe. The most affordable property on the market last month was a 428-square-foot, one-bathroom studio with an asking price of $89,000. The one-window unit at 135 Townsend Street in Dorchester is in need of renovations. The most expensive property in the city was a six-story, 9,500-square-foot corner townhouse with an asking price of $16.5 million. The restored 1833 Greek Revival house, at 8 Mt. Vernon Place in Beacon Hill, has six bedrooms and historic details, including a winding staircase and marble fireplaces.
Chicago
The rate of growth in Chicago’s job market is expected to slow this year, indicating the office market may not maintain its current pace for long, the Chicago Tribune reported. Office-based employers are likely to create 14,500 jobs, down from 35,200 a year ago. Chicago fell to 28th place this year among U.S. commercial real estate markets, down from 25th in 2006. Vacancy is expected to rise downtown, where 1.7 million square feet of new construction is planned. Still, rents there are likely to rise 3.7 percent this year because new offices will command higher rates.
Detroit
The real estate market in metropolitan Detroit floundered last year after 350,000 layoffs in the auto industry. The state, whose economic fortunes are closely tied to auto making, led the nation in foreclosures. The percentage of Michigan prime loans overdue by at least 90 days was 0.67 percent in the fourth quarter of 2006. But even homeowners who haven’t fallen behind on their mortgages have been affected by foreclosures. Homes located on blocks with multiple foreclosures have seen 10 to 20 percent decreases in property values. While the median price of a house in the U.S. was $219,300 in the fourth quarter, Detroit lagged behind at $154,600, the Seattle Times reported.
Las Vegas
The number of homes put up for sale in Las Vegas has increased steadily in recent months, the Las Vegas Review-Journal reported. Single-family listings jumped to 21,287 in March, a 22.4 percent increase from a year ago. Condos and townhouses remaining on the market saw a 63.5 percent increase to 6,000. Sales, on the other hand, have dropped off considerably. In March, 1,605 single-family homes were sold, 36.3 percent less than a year ago; 341 condos were sold, a 47.2 percent drop-off. Homes sold in March had a total value of $604.8 million, 37 percent less than a year ago, while dollar value for condo and townhouse sales fell 46 percent to $79.8 million. In January, Nevada had two-and-a-half times the national average in foreclosure filings with 2,397.
Los Angeles
British developers Candy & Candy acquired the Robinsons-May department store in Beverly Hills for $500 million in a near-record purchase, the Los Angeles Times reported. Beverly Hills-based New Pacific Realty had paid only $33.5 million for the property just three years earlier, though it was planning to spend $500 million to redevelop the site. Architect Richard Meier will design a new condominium and retail complex to replace the existing store at 9900 Wilshire Boulevard. It will consist of 252 condos in two 12-story buildings, a two-story building with townhouses and two four-story loft buildings.
A resurgence in the downtown Los Angeles retail market may be under way, thanks to its growing residential community. The current population is 30,000, but with 7,500 units under construction the number could top 40,000 by next year. Prominent restaurants such as Chaya Brasserie have signed leases in the area, and there has been particular interest in 7th Street locations, the Los Angeles Times reported. Retail sales in the last fiscal year jumped 7 percent from the previous year to $1.7 billion.
Phoenix
A record number of Arizonans want to sell their homes in a slowing market, the Arizona Republic reported. Around 50,000 houses and condominiums were listed in March, most were in the Valley. A healthy market typically has half that number, but new and resale listings have climbed steadily since last year, when totals exceeded 40,000.
The sale of the tallest building in Arizona has set a record price for Phoenix, the Arizona Republic reported. After drawing 16 offers, Brookfield Asset Management of Toronto sold the Chase Tower office building at 201 N. Central Avenue for $166.9 million to Crystal River Capital, a New York REIT. The previous record for a Phoenix office deal had been $155 million for two buildings sold in 2005, while the Hines building at 24th Street and Camelback Road sold for $107 million, the previous record for a single building sale.
San Francisco
National homebuilder Lennar Corp. will control much of the Bay Area’s future development, the San Francisco Chronicle reported. The company was selected last month by the Alameda City Council to redevelop the Hunters Point shipyard and Candlestick Point. Lennar, which already controls Mare Island Naval Station and San Francisco’s Treasure Island, supplanted Catellus Development Corp. as the major developer in the Bay Area over the past decade.
Seattle
Microsoft announced it will rent 1.3 million square feet of office space in Bellevue, in the largest office lease deal ever in the Seattle area, the Seattle Times reported. The software giant has agreed to occupy a total of five office buildings currently under construction by Schnitzer Northwest. The company hopes to have 5,000 employees working and living in Bellevue by 2009, while its overcrowded Redmond campus continues its expansion projects. The deal is expected to drive up rents in Bellevue’s expensive office market.
Investors who buy apartment complexes have targeted Seattle, betting on a strong rental market. In the past three months, more than 4,300 apartment units have been sold for a total of about $540 million, according to the Seattle Times. Investing in apartment rentals in the area makes sense as the job market continues to grow and most households can not afford to buy. In 2006, the median price for a single-family home in King’s County was $425,000. Last year, 3,100 new rental units were built in the Seattle area, though overall supply declined because 7,000 rental units were converted to condos.
Washington, D.C.
Real estate developers in Washington, D.C. are abandoning condominiums in favor of rentals, according to the Washington Times. The glut of new and old condos on the market has slowed recent sales. Condo resale prices in the D.C. area fell 6.1 percent last year. Condos had made up 50 percent of the 354,000 homes being built nationally in 2005; this year that number is down to 30 percent. Zom Mid-Atlantic and Monument Realty are among the developers making the switch to building rental apartments.
South Florida rent increases slow
While South Florida apartment vacancy rates remain well below the national average, rental rate increases are slowing down, the Miami Herald reported. This turnaround could be the result of a slowdown in condo conversions and the decision by some investors to turn condominiums back into rentals, increasing rental supply.
Average monthly rental rates in Miami-Dade County in the first quarter of 2007 were $1,058, up just 1.6 percent from last quarter and 5.9 percent from the first quarter of last year, according to a report released by real estate research firm Reis. Similarly, for Broward County the average rent was $1,051, up only 0.6 percent from the previous quarter and 5.2 percent from last year. Average vacancies were 3.8 percent for both counties, compared to the national average of 6 percent.
The nationwide failure of subprime mortgage lenders and expected increases in adjustable mortgage rates are likely to push homeownership down, adding to the pool of renters in South Florida and elsewhere.
Developers discover new areas
Developers are finding new areas in South Florida to build out. Brevard and Indian River counties boast lower land prices and lower building impact fees than Broward, Palm Beach and St. Lucie, the South Florida Sun-Sentinel reported. Another attraction is that Brevard and Indian River lack the affordable housing requirements Palm Beach imposes on communities of 10 or more houses.
So far DiVosta Building Corp., Lennar Corp. and Shelby Homes have been building communities in Vero Beach in Indian River County. DiVosta has also built in Palm Bay in Brevard County, where two-bedroom homes start at a little over $200,000, and three-bedrooms start from less than $300,000. Comparable homes in Palm Beach would start at $350,000. Lennar has five projects in Brevard. Homeowners in these new communities have been a mix of families and retirees seeking to avoid the high prices closer to Miami.
Hotel-condo projects on the decline
Construction of hotel-condos in South Florida is slowing as buyers are disappearing. Projects like the 138-unit Harrick are on hold, and delays are expected on some projects that have been announced but not started.
In the past two years, only 1,250 hotel-condo units have opened in Broward and Palm Beach counties. The Sun-Sentinel reported that 2,500 units are approved or under construction there, compared to 15,500 units in Orlando and 32,800 in Las Vegas.
High prices are scaring away prospective owners. Units that were $650 per square foot in the late 1990s now go for $1,300 per square foot. High prices have caused a dramatic reduction in presales over the past six months. Many developers are unable to sell enough units to qualify for a loan.
Average condo prices in Broward County this January were 6 percent lower than they were a year ago. Average prices in Palm Beach were up 2 percent from last year.
Hotel rates, vacancy rise
Occupancy is down in South Florida hotels — fewer tourists are booking rooms.
However, rates are up and those that are taking rooms are choosing luxury over budget locations. In February, the most recent figures available, rooms in Broward County averaged $180 per night, up 20 percent from a year ago, thanks in part to thousands of Super Bowl XLI spectators. Miami-Dade’s hotel rooms averaged $230 per night, up 24 percent from last year, the Miami Herald reported. The Super Bowl did not help fill rooms though, as occupancy dropped from 88 to 80 percent in Broward and from 84 to 82 percent in Miami-Dade in February compared to a year ago. According to Smith Travel, the number of overnight stays booked has declined in South Florida for 13 of the last 14 months.The decline in occupancy hasn’t hurt hotel revenues, which were up 10 percent in Miami-Dade last year, according to Smith. The industry prefers fewer rooms being rented for more money, which causes a decrease in staff and maintenance costs.
Housing slowdown hurts job growth
South Florida is feeling the effects of the national housing slowdown on industry and job growth, the Miami Herald reported.
According to the latest data available, year-over-year job growth in South Florida this February was just 1.2 percent, compared with 3 percent in early 2006. The construction industry saw 5 percent job growth, down from 12 percent early last year.
Local businesses — including car dealers, cruise lines, retail and restaurants — cite the housing slowdown as a cause of lower earnings and weak projections going forward.
Miami real estate fares worst; Jacksonville a possible bright spot [more]
A gently sloping park facing west gave the Brooklyn neighborhood Sunset Park its name, but it’s a new wave of developers who are trying to take advantage of that panorama with high-end condos. [more]
Demand rises in Bronx district, but construction woes hit some projects [more]
Court decision protects market-rate renters in conversion [more]
New rules to dampen sounds of construction, but critics fear added costs [more]
Hudson Yards development planning
The city plans this month to issue design guidelines and a request for proposals for the 26-acre Hudson Yards site on the Far West Side, the New York Sun reported. Redevelopment of the area, where the city wanted to build a stadium, could fall to a single developer who could build a 13-million-square-foot mega-project larger than Brooklyn’s Atlantic Yards. The Related Companies, Brookfield Properties, Vornado Realty Trust, Tishman Speyer and the Durst Organization are in the process of preparing bids to develop the site, according to sources.Law proposed to keep Starrett rents affordable
Senator Charles Schumer and Assembly Speaker Sheldon Silver are pushing a bill that would keep rents in Brooklyn’s Starrett City affordable regardless of whether it is sold, NY1 reported. The bill would require all the apartments to remain affordable through subsidizes from the Mitchell-Lama program. Clipper Equities, whose attempts to buy the complex were already rejected twice, says it supports the legislation.Meatpacking gets historic nod
The entire Meatpacking District has been approved for listing on the State and National Register of Historic Places. The designation recognizes the area’s importance as a commercial hub in the city. Property owners who preserve their historic buildings will be entitled to tax breaks and grants.UWS Historical Society plan may get OK
The Landmarks Preservation Commission said last month it would approve the New York Historical Society’s plans to renovate its landmarked building’s façde on Central Park West between 76th and 77th streets. The LPC had not yet voted on the matter, however, which would widen the building’s entrance. Critics of the Historical Society’s plans say the façde renovation is merely a front for the organization’s much more controversial proposal to build a 23-story residential tower on its property, the New York Sun reported.Boerum Hill jail plan’s mixed reviews
The Department of Corrections’ plans to reopen a jail on Atlantic Avenue shuttered in 2003 are being eyed warily by many Boerum Hill residents. Some nearby businesses, meanwhile, say the jail could increase their sales. Some area residents say the jail, which would house 1,400 inmates, will reverse the neighborhood’s recently accelerating gentrification and high-end residential development, while some local businesses believe it will increase foot traffic to their stores, the New York Times reported.Law tightens oversight of dilapidated buildings
A bill introduced in the City Council last month will give the city the right to go into buildings with code violations, make repairs and then charge landlords for the cost of the repairs. The law seeks to bring the city’s stock of rundown housing up to code and to ensure that more habitable apartments are available for low-income tenants, the New York Times reported.Legislature may battle over loft law
The state Legislature may have a battle brewing over loft laws that allow tenants to live in loft spaces that they illegally converted to residences without facing major rent increases. The law was set to expire at the end of April, and many Democrats want to renew or extend it, while many Republicans want to repeal the law altogether, according to the New York Post.Bronx rezone gains momentum
The Department of City Planning proposed a rezoning of a 134-block area in the Wakefield and Eastchester sections of the Bronx that would limit most new development. The rezoning seeks to preserve the suburban character of the area following the recent construction of several large developments, the New York Daily News reported.Lender uses roving ‘Mod Squad’ to seek out delinquent borrowers [more]
Appraiser trade groups say surge in foreclosures caused, in part, by pressure from lenders [more]
Credit-impaired borrowers lack safety net mandatory in prime market [more]
London condo sale is world’s priciest
A $198 million penthouse that will overlook Hyde Park broke the record for the most expensive condo sale in London — and most likely the world, the Times of London reported.The foreign minister of Qatar, Sheik Hamad bin Jassem al Thani, signed a contract for the largest flat in the Richard Rogers-designed One Hyde Park project, which will have 86 units and be completed in two years. Amenities in the security-conscious building are reported to include bullet-resistant walls and windows, private elevators with eye scanners and panic rooms. Two of the other penthouses have also been sold in the condo, where prices run as high as $9,914 per square foot.
The deal caps a booming market of multimillion dollar homes in the London area, where properties valued above $10 million are seeing price increases of 50 percent per year.
Investors target second-tier cities in China
Competition in China’s major cities has led investors to consider previously ignored “second-tier” cities like Chongqing in hopes of finding higher returns, according to the International Herald Tribune.Although it does not have the cachet of Shanghai or Beijing, Chongqing has a population of 4.1 million and a regional population of more than 31 million — making it the country’s largest population center. China has 93 cities with populations of more than one million, and 20 cities with populations of more than five million.
While there is no formal definition of a first-tier or second-tier city in China, the Knight Frank real estate office in Hong Kong identifies 60 Chinese cities as second-tier or higher. Many of them are located near the eastern coast, or inland in regions at the heart of industrial growth in China.
Investment is growing as China quietly enacted its first law that explicitly protects private property in March. All land in China is owned by the state, and buyers trade only the right to use property on it for up to 70 years. The new law is intended to address the disposition of property after that term expires.
Europe’s tallest apartment tower to rise in Leeds
Leeds in northern England will be home to Western Europe’s tallest residential high-rise in 2010.The Lumiere, a two-tower, 54-story project, will be built by London-based development company Yoo and designed by Philippe Starck. Yoo aims to raise “vertical villages” that bring the feel of a traditional village to an urban center, the International Herald Tribune reported. The connected building will provide lots of common space, services and shops.
Yoo’s other projects include tall residential towers in Boston, Toronto, Mexico, Sydney, Hong Kong and Tel Aviv. The company’s most ambitious current project is the three-tower Icon Brickell complex in Miami.
Spanish vacation home prices poised for fall
High loans terms facing developers could cause a slump in the Spanish vacation homes market, the International Herald Tribune reported.Some Spanish developers are paying five times more to borrow than U.S. developers. And vacation home prices may drop as much as 10 percent this year.
Although four million homes in Spain were sold to foreigners in the last 10 years, real estate spending by foreigners dropped 11 percent in 2006. There was also a 10 percent drop in new mortgages to Spanish families. RE/MAX International cut prices by as much as 26 percent on more than 5,000 homes in Spain in January. Still, the average price for a Spanish home in December was $367,000, twice what it was in 2000.
New York Mortgage Trust is one of a handful of New York-based mortgage companies taking drastic measures to stay afloat as the industry struggles with lower mortgage volume.
The company is seeking to stabilize its business following the sale last month of its retail mortgage division, the New York Mortgage Company, which represented approximately 75 percent of the company’s mortgage business. The unit was sold to IndyMac Bancorp for approximately $13.4 million in a deal that closed in early April.
In addition, as a result of the transaction, Steven Schnall, co-chief executive of New York Mortgage Trust, resigned as chief executive officer, remaining on only as chairman of New York Mortgage Trust. David Akre remains vice chairman and co-CEO with Steve Mumma, who is also replacing Schnall as president.
“We have a strong reputation and infrastructure, but lacked the scale to operate profitably and needed someone who had the scale,” Schnall said.
IndyMac is the eighth-largest residential lender in the United States, with a 4.5 percent national market share. According to Schnall, the mortgage company, which last year originated about $90 billion in mortgage loans, bought 32 New York Mortgage retail branches in 11 states.
Other New York City-based mortgage companies are looking to change their business strategy to stay afloat. GuardHill Financial Corp., for example, is making the transition from a mortgage brokerage to a banker.
There has been an increasing number of defaults among subprime borrowers, and accelerating foreclosure rates are starting to extend to Alternative A, or Alt-A mortgages, which fall between prime and subprime, often charging higher interest rates while requiring less income documentation. Approximately 26 percent of New York Mortgage Trust’s 2006 mortgage business was Alternative A loans, according to Dave Akre.
“Consolidation is going to continue at a very rapid pace,” Schnall said. “Most small to mid-size firms will be consolidated. There are more companies for sale now than I’ve ever seen. Companies are going belly-up before you can strike a deal with them.”
New York Mortgage Company now operates as a unit of IndyMac, which took on approximately 450 New York Mortgage employees under its umbrella. Separately, New York Mortgage Trust sold its wholesale lending division to Tribeca Lending Corp., a subsidiary of Franklin Credit Management Corporation.
New Miller Samuel partnership
Real estate appraisal firm Miller Samuel has entered into a joint venture with Radar Logic, a company that enables the creation of financial derivatives on various types of real estate. The partnership, Radar Logic Research, will publish research products. Jonathan Miller, the president of Miller Samuel, will be the new company’s chairman.Marcus & Millichap expands Brooklyn office
Marcus & Millichap Real Estate Investment Brokerage Company has relocated and expanded its Brooklyn office to 16 Court Street. The 2,000-square-foot office will house up to 60 investment sales specialists.Two Trees to launch first general sales office
Two Trees Management plans to open Two Trees Real Estate, its first general real estate sales office, the New York Observer reported. The office is scheduled to open by early May and will broker listings in Two Trees’ developments, as well those as in other projects.REIT forms real estate securities business
New York-based REIT Gramercy Capital Corp. has announced the creation of a real estate securities group. Newly appointed senior vice president Joseph Romano will lead the group, which will focus on the acquisition, trading and financing of real estate-related securities.Andalex Group launches hospitality and gaming company
The Andalex Group, a developer whose projects include the 237-unit Arris Lofts condo in Long Island City, has launched Silver Entertainment LLC, a new hospitality and gaming company. Hugh Shaddick was hired to head the new venture as senior vice president. Silver Entertainment will focus on the acquisition and development of casino gaming and resort operations in the United States, the Caribbean and Latin America.Commercial real estate company Enigma Financial launches
Principal Ryan Hyman has launched a New York-based commercial real estate financing and sales company, Enigma Financial. Enigma will arrange both acquisition and refinancing loans for commercial real estate transactions nationwide. The firm will also assist clients in buying and selling commercial properties.IFIL closes on C & W acquisition
IFIL Group, an Italian investment trust, closed in early April on the 71.5-percent acquisition of Cushman & Wakefield from the Rockefeller Group. Cushman & Wakefield management and employees own the remainder of the company. The deal was first announced in December.JP Morgan Property Exchange launches alliance program
JP Morgan Property Exchange has created a Strategic Alliance Program for real estate and accounting firms nationwide. The program will allow JP Morgan Property Exchange to enter formal alliances to provide services including 1031 exchanges. Michelle Allan-Thissell will head the new program along with Jordana Chutter.
For City Connections Realty to strike at the commercial market while it’s hot, it needed direct access to the Rolodex of an industry insider.
[more]With more than 1,500 Prudential Douglas Elliman agents in nine offices, Steven James has his hands full.
James, the recently promoted president of Manhattan brokerage, started his career as the manager of Elliman’s Upper West Side office in 1991.
Prior to his promotion, James was senior executive vice president and director of sales for the two Upper East Side offices, located at 575 Madison Avenue and 980 Madison Avenue.
James will continue to supervise the Upper East Side office while working with the management team for all the sales offices in Manhattan. “I hope to be a good sounding board and a strong ally for all our managers in their strategic planning for their offices,” he said.
James said much has changed in the industry since 1979, when he started out as a real estate agent in Scarsdale. Consumers are much savvier, which means agents need to be just as savvy, he said. As a result, the brokerage has increased its analysis of the market — providing sales data to brokers on a weekly basis in addition to the quarterly report the firm puts out in conjunction with appraisal firm Miller Samuel.
Chances are there might be more brokers at a typical rock show by Open House, a band consisting of brokers, than at an actual Manhattan open house.
The band was formed about six months ago by the Corcoran Group’s Robert Bernstein and Eric Fleming, who play electric guitar and drums.
“We would go to a studio and play and have fun when we realized that we’re really good,” said Bernstein. “It’s ’70s and ’80s pop rock, so everyone knows the music.”
At bars like Limerick, Open House plays covers that include an eclectic mix of Donna Summer, Bon Jovi and Sade’s “Smooth Operator.”
“We are not the best musicians and singers, but it’s fun,” Fleming said. “I just don’t want to be construed as all real estate all the time. Both my customers and owners think it’s really cool.”
Open House’s next gigs will be a REBNY talent show and the Corcoran Cares charity event in May.
This spring, instead of shuttling to listings in limousines, a couple of brokers who sell some of the priciest properties in Manhattan are riding around town on bicycles.
For agents Robby Browne and Sarah Bond, bike riding is cheap, convenient and a good way to get some exercise.
Browne, a senior vice president at the Corcoran Group who set a then-Manhattan price record in 2003 when he brokered a $42 million deal at the Time Warner Center, cycles to appointments, usually on days he’s not seeing clients.
“There are other brokers here who ride to work, and we share this secret smile like we know something that no one else knows,” said Browne, who said he rides “the cheapest 23-inch 10-speed” and has been a bicyclist during his entire 21 years as a broker.
Browne said bicycling on the job has helped him secure clients.
“I once debated whether to bike or not to a $3.5 million apartment on Park Avenue,” he said. “When I got there, they thought it was so incredible and immediately felt comfortable. I helped them buy the property and sell it later.”
Bond, also a senior vice president at Corcoran, has a $9.25 million townhouse on East 80th Street in contract. She’s been biking to and from listings during her 15 years as a broker.
“If I felt comfortable, I would arrive on my bike,” Bond said. “You go and meet people, but you don’t inflict your bike riding on them. When I’m with a client, we’ll take a cab.”
Bond, who rides a secondhand, 40-year-old Huffy. added, “I don’t understand why the whole world doesn’t bike everywhere.”
Artists and developers aren’t always on the opposite side of the fence in Brooklyn. Sometimes they work together on fences and other projects.
At 80 Met, a luxury six-story condo in Williamsburg, the structure will be built around the performance space used by a nontraditional dance studio called StrebLab for Action Mechanics.
Developer Steiner Equities bought the entire block for its development, but instead of booting the arts group sitting in the middle of the block, the group, which was in the middle of a 10-year lease, purchased its space at 51 North 1st Street.
Doug Steiner, president of the development firm, said he wanted to help preserve some of the artistic element of Williamsburg and even plans to market the condo project with the help of StrebLab.
“I’m inspired to have this opportunity to collaborate with a developer that is both aesthetically minded and progressive,” said Elizabeth Streb, director of the dance studio.
Halstead is set to market apartments and townhouses for the 174-unit development, which features an indoor pool.
In Dumbo, proving that creatively adorned fences make good neighbors, J Condo has become a patron of the arts by hiring local artist Pasqualina Azzarello to paint flowers on the fence that borders the construction site of the 33-story tower at 100 Jay Street.
Developer David Kramer also created ProJect Dumbo, a contest soliciting art from anyone who lives or works in Dumbo for the lobby, lounge and children’s playroom.
“We had a party and invited all the [residents] to come, meet each other and vote on the art that will eventually go into the building,” said Kramer, who added that there are contracts signed for 70 percent of the development’s 267 units. “When you have a new building, there is not necessarily a blending of new people to the neighborhood with those who have been here. This was a wonderful setting for that.”
The Real Deal takes a look back at some of the big stories in New York City over the past cen [more]
